A transportation management system, or TMS, is a software program that manages transportation operations.
For fleets, a TMS acts as a centralized program that coordinates data collection and automates tasks across nearly every aspect of fleet operations. A TMS can communicate with a fleet’s other software programs, including telematics platforms, invoicing software, dispatcher-driver communications systems, and more.
Some companies, including shippers, will integrate a TMS within their enterprise resource planning or supply chain management programs. These systems are quickly becoming a ‘must-have’ technology for motor carriers operating multiple trucks.
See also: Product Spotlight: Transportation management systems
This is part of FleetOwner's Fleets Explained, a Trucking 101 series to break down aspects of the trucking and fleet management industries. You can read more from the series, launched in May 2024, at fleetowner.com/fleets-explained. To submit topic ideas, clarifications, and corrections, email [email protected].
What are the benefits of a TMS?
A well-functioning TMS improves a fleet’s operational efficiency in countless ways. A TMS’s benefits stretch as far as its capabilities for data collection and automation.
A TMS can optimize shipment routes and schedules, improving delivery efficiency. An ideal system can incorporate any data influencing delivery, such as load size, delivery deadlines, driver availability, driver behavior, regulatory requirements, height clearances, and more.
Document management becomes much easier with the help of a TMS. The system can automate the generation and management of shipping documents, including bills of lading, freight invoices, and proof of delivery. This reduces the labor needed for manual paperwork and limits the risk of errors.
A TMS can also improve data access and utility. Many systems offer customizable analytics dashboards, providing quick access to key performance indicators like on-time delivery rates, fuel efficiency, trailer utilization, and more.
Last but not least, a TMS simplifies regulatory compliance and safety. The system can help manage drivers by logging their hours of service, certifications, and driving behaviors. A TMS can help maintain regulatory compliance by managing vehicle maintenance and inspection records, monitoring international shipping requirements, and coordinating routes around hours-of-service requirements or cargo-specific road limitations.
See also: Top 5 carrier TMS software providers for 2024
An ideal TMS can be further customized to a fleet’s specific operational needs. It can incorporate data from the business’s existing systems, such as its warehouse management system, accounting documents, or enterprise resource planning system. It can also include features specific to the fleet’s equipment, such as temperature control/monitoring for refrigerated loads. TMS vendors also often provide training and support to help fleets utilize and maintain their systems with ease.
Additional data management options
Transportation management systems can be as sophisticated or simple as a fleet needs. The functionality and interconnectivity of a TMS is as far-reaching as data management itself. Fleets can receive more data—and do more with its data—through telematics and machine learning.
A TMS can receive and store telematics information. This means the system can incorporate real-time vehicle performance information, braking events, GPS data, video feeds, and more. The connection between fleet vehicles and the fleet TMS can be as rich as a vehicle’s gateway allows.
Data management at a large scale opens the door for machine learning. A fleet’s TMS can interface directly with AI-powered tools to create data inferences with ease, providing solutions like predictive maintenance, network planning, and accessible analysis.
See also: AI is a tool worth exploring
How should fleets deploy a TMS?
A transportation management system requires fleets to operate sophisticated databases and communications infrastructure. Just as the benefits of a TMS can vary widely, so can the costs of TMS deployment.
Generally, fleets have the option to deploy their TMS either through the cloud or on premise. Both options have advantages and drawbacks. Many businesses choose a hybrid of on-premise and cloud-based infrastructure that suits their needs.
Cloud-based TMS deployment is an attractive option for smaller fleets. In this option, the database and communications infrastructure are managed by a cloud service provider like Microsoft Azure or Amazon Web Services through a subscription-based pricing model. This deployment can be fast to implement, requires less upfront investment, and is easily scalable. However, customization is limited, and fleets’ operational independence is limited.
On-premise TMS deployment can be much more expensive but offers greater operational control. On premise, fleets need to develop and maintain the database and communications infrastructure themselves. This requires a significant upfront cost, maintenance burden, and lengthy implementation process. However, it also provides fleets with a highly customizable environment and total server control—allowing for greater operational independence.
